New Emergency Employment and Income Maintenance Program

On 04/28/2021, Provisional Measure No. 1,045 was published, which deals with the New Emergency Program for The Maintenance of Employment and Income, aiming to face the economic crisis caused by the continuity and worsening of the pandemic of the new coronavirus (Covid-19) in the country.
 
The New Program renews the 2020, established by Provisional Measure No. 936, converted into Law No. 14,020/2020, re;rectifies the rules for the proportional reduction of working hours and salary, as well as for the temporary suspension of employment contracts.
 
The signing of Provisional Measure No. 1,045 resulted from a limiting factor brought by Law No. 14,020/2020, of 07/06/2020, which provided for the possibility of extending the Emergency Employee and Income Maintenance Program while the state of public calamity established by Legislative Decree No. 06/2020.
 
Considering that, according to the decree itself, the state of public calamity ended on 12/31/2020, there was a need for the Federal Government to create a new Provisional Measure to recover the Emergency Program established in 2020.
 
Thus, the New Program published on 04/28/2021 is intended for the private sector and employees eligible for the Service Time Guarantee Fund (FGTS) and unemployment insurance.
 
Among its provisions, the rules and conditions of the 2020 Program remain, with some modifications, illustrated below.
 
Emergency Benefit for The Preservation of Employment and Income
 
The Emergency Benefit will be paid by the Ministry of Economy, while the proportional reduction of working hours and salary or the suspension of the employment contract persists.
 
Its value will be based on the calculation of the portion of unemployment insurance to which the employee would be entitled, applied in the same percentage adopted in cases of wage reduction and working hours; 100% on the calculation basis for cases of suspension of the employment contract in companies with revenues of up to R$ 4.8 million in 2019; or 70% on the calculation basis for cases of suspension of the employment contract in companies with revenues exceeding R$ 4.8 million in 2019.
 
Employees who have a reduction in working hours and salary below twenty-five percent will not be entitled to the perception of emergency benefit.
 
Its concession is independent of compliance with any purchase period, time of employment contract and number of salaries received, not being applicable to employees with an employment contract in the intermittent modality. In addition, it can be accumulated with the payment of monthly compensatory aid.
 
Monthly Compensatory Aid
 
The Monthly Compensatory Aid will be paid by the employer on an optional basis for cases of reduction of working hours and salary or for cases of suspension of the employment contract in companies with annual revenues in 2019 below R$ 4.8 million.
 
For cases of suspension of the employment contract in companies with annual revenues in 2019 exceeding R$ 4.8 million, the Monthly Compensatory Aid will be mandatory and will correspond to 30% of the employee's salary.
 
Because it has an indemnity nature, the Monthly Compensatory Aid will not have an impact on social security contributions, nor on other taxes and fees on payroll, as well as will not be the basis for calculating the employee's FGTS.
 
Furthermore, your payment will not integrate the basis for calculating withholding income tax or the annual income adjustment statement of the employee's individual.
 
The Monthly Compensatory Aid may be considered deductible operating expense in determining the actual profit and the basis for calculating the Social Contribution on Net Income – CSLL of legal entities taxed by actual profit.
 
Reduction of Working Hours and Reduction of Salary
 
The New Program renews the possibility of a proportional reduction in the working hours and salaries of employees, which can be done in a sectoral, departmental, partial or total work.
 
As a rule, the reduction continues to be made in the percentages of 25%, 50% or 70% and gives the employee the right to receive, in addition to the reduced salary, the Emergency Benefit and compensatory aid, to be paid optionally by the employer.
 
In the case of a reduction of 25% or for employees who receive a salary equal to or less than R$ 3,300.00 or more than R$ 12,867.14 (double the maximum limit of benefits of the General Social Security System), the agreement may be made individually between employee and employer.
 
It is also perceitable the conclusion of an individual agreement for proportional reduction of working hours and salary when the agreement does not result in a decrease in the total amount received monthly by the employee, included in this amount the Emergency Benefit of Maintenance of Employment and Income, the Monthly Compensatory Aid and the salary paid by the employer due to the hours worked by the employee.
 
Reductions above the percentage of 25% and which are not included in the above exceptions can only be achieved through prior trade union negotiation, which also applies to reduction percentages different from 50% and 70%.
 
For individual agreements, the proposal for reduction or suspension must be forwarded to the employee at least two calendar days in advance, and it is up to the employer to communicate to the labor union and the Ministry of Economy the conclusion of the agreement within 10 days.
 
The maximum period of reduction of the working day and salary becomes 120 days, maintaining the preservation of the value of the worker's hourly wage, as well as the obligation to grant the benefits offered in the course of the employment contract, either by law, collective norm or liberality of the employer.
 
The regular work day shall be reestablished, within two calendar days, from the date established as the closing date of the agreed reduction period or the date of communication of the employer who informs the employee of his decision to anticipate the end of the agreed reduction period.
 
Suspension of the Employment Contract
 
It consists of the individual or collective adjustment for suspension of the employment contract by the employer, with the payment of up to 30% of the employee's salary and the granting of the Emergency Benefit by the Federal Government.
 
For companies with gross revenueof up to R$ 4.8 million in fiscal competence 2019, the Emergency Benefit will correspond to 100% of the amount of the unemployment insurance portion and its agreement may occur individually for employees who receive salary equal to or less than R$ 3,300.00 or more than R$ 12,867.14 (double the maximum limit of benefits of the General Social Security System). In these cases it is not mandatory to pay Compensatory Aid.
 
For companies with gross revenues greater than R$ 4.8 million in fiscal competence 2019, the Emergency Benefit will correspond to 70% of the amount of the unemployment insurance portion and its agreement may occur individually for employees who receive a salary equal to or less than R$ 3,300.00 or more than R$ 12,867.14 (double the maximum limit of benefits of the General Social Security System). In these cases, the employer must pay Compensatory Aid in the percentage of 30% of the employee's salary. 
 
Individual agreement is also admitted for suspension of the employment contract when the agreement does not result in a decrease in the total amount received monthly by the employee, included in this amount the Emergency Employment and Income Maintenance Benefit and the Monthly Compensatory Aid.
 
The suspension of the contract must be agreed by individual written agreement between employee and employer and forwarded to the employee two calendar days in advance. The formalization of the agreement should be forwarded to the union and the Ministry of Economy within ten days of its conclusion.
 
As with the reduction of the workday, the temporary suspension of the employment contract for employees who earn between R$ 3,300.00 and R$ 12,867.14 (double the maximum limit of the benefits of the General Social Security System) is only authorized through collective bargaining.
 
For the suspension of the employment contract, the maximum period is now 120 days, maintaining the obligation to grant the benefits offered in the course of the employment contract.
 
In the case of suspension of the employment contract, the employer's duty to pay social security payments, which may be made by the employee himself, as an optional insured, so that the period is counted for retirement purposes and other social benefits governed by the INSS.
 
During the suspension period, the employee will not be able to remain working, even partially or at a distance, under penalty of mischaracterization of the suspension.
 
The contract shall be reestablished, within two calendar days, from the date established as the closing date of the agreed suspension period or the date of communication of the employer who informs the employee of his decision to bring forward the end of the agreed suspension period.
 
Provisional Guarantee
 
The provisional guarantee of employment is intended for those who received the Emergency Benefit and corresponds to the period of suspension or reduction of journey until its identical projection for after the closure of this condition.
 
In the case of pregnant employees, the guarantee of employment shall be computed for the period equivalent to that agreed for the reduction of working hours and salary or for the temporary suspension of the employment contract, counted from the end of the period of the guarantee of pregnant employment of 05 months, established in point "b" of item II of the caput of art. 10 of the Act of Transitional Constitutional Provisions.
 
If the termination occurs during the period of stability, the payment of (i) fifty percent of the salary to which the employee would be entitled in the period of provisional guarantee in employment, in the event of a reduction of working hours and salary equal to or greater than twenty-five percent and less than fifty percent; (ii) seventy-five percent of the salary to which the employee would be entitled in the period of provisional guarantee at work, in the event of a reduction in working hours and salary equal to or greater than fifty percent and less than seventy percent; and (iii) one hundred percent of the salary to which the employee would be entitled in the period of provisional guarantee in employment, in the case of reduction of working hours and salary in percentage equal to or greater than seventy percent or temporary suspension of the employment contract.
 
It does not apply to the chances of dismissal, termination of employment contract by agreement and termination for just cause.